Fuel subsidies and carbon emission: evidence from asymmetric modelling

Adekunle, Ibrahim Ayoade; Oseni, Isiaq Olasunkanmi

doi:10.1007/s11356-021-12384-0

Cited by 13 publications

(11 citation statements)

References 84 publications

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“…Increased investment in energy exploration facilities within the terrain of resource-rich nations could block leakages along the entire oil exploration value chain (Adekunle and Oseni, 2021). African resource-rich nations should look inward at their use and management of factor endowment.…”

Section: Conclusion Implications Limitations and Suggestions For Furt...mentioning

confidence: 99%

Natural resource endowments and growth dynamics in Africa: evidence from panel cointegrating regression

Adekunle

Maku

Williams

et al. 2023

MEQ

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PurposeWith heterogeneous findings dominating the growth and natural resources relations, there is a need to explain the variances in Africa's growth process as induced by robust measures of factor endowments. This study used a comprehensive set of data from the updated database of the World Bank to capture the heterogeneous dimensions of natural resource endowments on growth with a particular focus on establishing complementary evidence on the resource curse hypothesis in energy and environmental economics literature in Africa. These comprehensive data on oil rent, coal rent and forest rent could provide new and insightful evidence on obscure relations on the subject matter.Design/methodology/approachThis paper considers the panel vector error correction model (PVECM) procedure to explain changes in economic growth outcomes as induced by oil rent, coal rent and forest rent. The consideration of the PVECM was premised on the panel unit root process that returns series that were cointegrated at the first-order differentials.FindingsThe paper found positive relations between oil rent, coal rent and economic development in Africa. Forest rent, on the other hand, is inversely related to economic growth in Africa. Trade and human capital are positively related to economic growth in Africa, while population growth is negatively associated with economic growth in Africa.Research limitations/implicationsShort-run policies should be tailored towards the stability of fiscal expenditure such that the objective of fiscal policy, which is to maintain the condition of full employment and economic stability and stabilise the rate of growth, can be optimised and sustained. By this, the resource curse will be averted and productive capacity will increase, leading to sustainable growth and development in Africa, where conditions for growth and development remain inadequately met.Originality/valueThe originality of this paper can be viewed from the strength of its arguments and methods adopted to address the questions raised in this paper. This study further illuminated age-long obscure relations in the literature of natural resource endowment and economic growth by taking a disaggregated approach to the component-by-component analysis of natural resources factors (the oil rent, coal rent and forest rent) and their corresponding influence on economic growth in Africa. This pattern remains underexplored mainly in previous literature on the subject. Many African countries are blessed with an abundance of these different natural resources in varying proportions. The misuse and mismanagement of these resources along various dimensions have been the core of the inclination towards the resource curse hypothesis in Africa. Knowing how growth conditions respond to changes in the depth of forest resources, oil resources and coal resources could be useful pointers in Africa's overall energy use and management. This study contributed to the literature on natural resource-induced growth dynamics by offering a generalisable conclusion as to why natural resource-abundance economies are prone to poor economic performance. This study further asks if mineral deposits are a source or reflection of ill growth and underdevelopment in African countries.

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Section: Conclusion Implications Limitations and Suggestions For Furt...mentioning

confidence: 99%

Natural resource endowments and growth dynamics in Africa: evidence from panel cointegrating regression

Adekunle

Maku

Williams

et al. 2023

MEQ

Self Cite

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“…In a related paper 11 demonstrated that a rise in fossil fuel subsidies generates an expansion in ecological footprint in developing countries for the period, 2010-2017. 12 suggested that the removal of fuel subsidy is inversely associated with CO 2 emissions in a developing economy for the period, 1980-2018. There are at least three possible hypotheses on the relationship between transportation subsidies and CO 2 emissions in the transport sector.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The results suggest that reduction in fossil fuel subsidies generate a decrease in CO 2 emissions. In a related paper 11 demonstrated that a rise in fossil fuel subsidies generates an expansion in ecological footprint in developing countries for the period, 2010–2017 12 . suggested that the removal of fuel subsidy is inversely associated with CO 2 emissions in a developing economy for the period, 1980–2018.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Our first contribution is that we have focused on the relationship between subsidies and CO 2 emissions in the transportation sector, which to the best of our knowledge, has not been adequately considered in the literature. The existing papers on environmental impact of subsidies have mostly concentrated on the relationship between energy subsidies and aggregate emissions index 11,12 . Second, we include economic complexity and uncertainty among the control variables in the analysis.…”

Section: Introductionmentioning

confidence: 99%

“…The existing papers on environmental impact of subsidies have mostly concentrated on the relationship between energy subsidies and aggregate emissions index. 11,12 Second, we include economic complexity and uncertainty among the control variables in the analysis. The impact of these two variables has not been adequately explored in the existing literature.…”

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Transportation fuel subsidies and CO ₂ emissions: The roles of economic complexity and uncertainty

Solarin

Al‐mulali

2021

Env Prog and Sustain Energy

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Transportation fuel subsidies have been rising in several developing countries. In order to broaden our understanding of transportation fuel subsidies, many attempts have been made in the literature to investigate the impact of the transportation fuel subsidies. This is mostly because exposing the various negative effects of transportation fuel subsidies might stimulating the appropriate authorities to act against the growing transportation fuel subsidies. However, the impact of transportation fuel subsidies on pollution has not been adequately examined in the literature. This study investigates the determinants of environmental degradation with a focus on the role of transportation fuel subsidies in selected developing countries. The control variables considered in this study include economic complexity and uncertainty, which have not been sufficiently examined in the existing literature. Pollution from transport sector is used as an indicator of environmental degradation. The study adopts a dynamic panel data method, which offers more reliable results relative to analyses done via conventional methods. The empirical findings suggest that an increase in transportation fuel subsidies generate a rise in transportation sector CO2 emissions. Specifically, a 1% rise in transportation fuel subsidies per capita will increase the transport sector CO2 emissions by between 0.041% and 0.094%. The results further illustrate that an increase in population, real gross domestic product per capita or uncertainty raises environmental degradation, while a rise in economic complexity reduces environmental degradation. It is observed that the impact of transport oil subsidies per capita is less pronounced in countries with higher per capita income.

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Expanding Roles of Environmental Dynamics in Climate Change in Nigeria

Lawal

Adeyinka

2023

The Palgrave Handbook of Global Social Change

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Fuel subsidies and carbon emission: evidence from asymmetric modelling

Cited by 13 publications

References 84 publications

Natural resource endowments and growth dynamics in Africa: evidence from panel cointegrating regression

Natural resource endowments and growth dynamics in Africa: evidence from panel cointegrating regression

Transportation fuel subsidies and CO ₂ emissions: The roles of economic complexity and uncertainty

Expanding Roles of Environmental Dynamics in Climate Change in Nigeria

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Fuel subsidies and carbon emission: evidence from asymmetric modelling

Cited by 13 publications

References 84 publications

Natural resource endowments and growth dynamics in Africa: evidence from panel cointegrating regression

Natural resource endowments and growth dynamics in Africa: evidence from panel cointegrating regression

Transportation fuel subsidies and CO 2 emissions: The roles of economic complexity and uncertainty

Expanding Roles of Environmental Dynamics in Climate Change in Nigeria

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Resources

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Transportation fuel subsidies and CO ₂ emissions: The roles of economic complexity and uncertainty